- Production test confirms gas-condensate exploration discovery
- Application of new seismic technologies shows early success and identified further exploration potential in the region
- Existing nearby infrastructure could be used for fast track development
Petrom, the largest oil and gas producer in South Eastern Europe, announces the first exploration discovery in Romania based on the application of new technologies. The discovery well was drilled in the Exploration Block I, Adjud. During testing a daily flow rate of 130,000 cubic meters of natural gas and 11 tons of condensate (approximately 900 boe/day) could be confirmed.
Werner Ladwein, member of the Executive Board of Petrom, responsible for Exploration and Production: “The modern technologies that we implemented, especially the 3D and 2D seismic technology, are the basis of this early exploration success. Following our exploration strategy we started the intense seismic programs in 2005 and launched the new exploration drilling campaign at the end of 2006. The Torcesti discovery was one of the first wells of this campaign and that proves that we are on the right track. We will continue to invest in modern technologies on a large scale. Only this year, half of the investment budget of Petrom, namely 1 billion euros, will be used in upstream”
The mentioned results were reported at the 570 Torcesti well, as part of the activities performed at the exploration block I Adjud, near the city of Focsani. The Torcesti well was spud end of 2006 and drilled to a depth of 2986 m. In order to assess the commerciality of the field, new 250 km of 2D seismic has been already acquired and drilling will be continued.
Petrom currently assesses the tie-in options into the nearby existing export infrastructure.
„We intend to start the development of this new field as soon as possible. We think it is possible to start production already end 2007 or beginning of 2008. We will drill another well and install a gas treatment unit, gas tie-in pipelines and a metering station”, added Werner Ladwein.
Following the prove of this new exploration concept, Petrom identified new exploration opportunities in the area and further exploration activities will be carried out.
Exploration and Production – a core segment for the company’ s growth
The Petrom objectives until 2010 in exploration and production aim the stabilization of the daily production at 210,000 boe in Romania, increase of the reserves replacement rate to 70%, develop business in the Caspian Region, increase international production level at 70,000 boe/day and reduction of production costs to 9 USD/barrel. Investments in exploration and production will amount to approximately 1.5 billion euro, until 2010. Only in exploration the investments will amount to approximately 100 mn per year.
In 2006, the reserves replacement rate went up from 11% in 2004 to 33%, due to the 3D studies performed in Romania and Kazakhstan. The first exploration wells based on the new technologies were drilled with a success rate of 50%.
The most important projects developed in Kazakhstan in 2006 focused on the exploration and appraisal of the Jusaly block and the starting of the development stage of the Komsomolskoe field.
The tests performed on the Jusaly block confirmed remarkable results, therefore Petrom estimates a maximum daily production of 200.000 cubic meters of natural gas and 70 cubic meters of condensate (approximately 1,750 boe/day).
Petrom approved the development plan for the Komsomolskoe field and the investments allocated to this project amount to 190 million USD. The development of this field will generate a daily production of approximately 10,000 boe, beginning with the year 2008.
In accordance with its strategy of international development, Petrom entered the Russian market following the acquisition of a 74.9% stake of the company Ring Oil Holding & Trading Ltd. The company owns eight exploration licenses and one exploration and production license in Russia.
For 2006 the level of the total oil and gas production was of 73.06 mn boe, namely 4.78 mn tons of crude and condensate and 5.93 bn cubic meters of natural gas. The production of crude in Kazakhstan was of 1.6 million boe.
Petrom is the largest Romanian oil and gas group, with activities in the business segments of Exploration and Production, Refining and Petrochemicals, Natural Gas, as well as Sales and Marketing. Petrom exploits estimated oil and gas reserves of 1 billion boe, has an annual refining capacity of 8 million metric tons and holds 593 filling stations in Romania. The company also has an international network of 211 filling stations located in Moldova, Bulgaria and Serbia. In 2006 the turnover of Petrom was EUR 3,709 million, EBITDA was EUR 1,020 million. Following the share capital increase OMV, the leading oil and gas group in Central Europe holds a 51,011% share in Petrom. OMV is active in 13 Central European countries in its Refining and Marketing business segment and in 19 countries on five continents in Exploration and Production. The Romanian state holds 30.862% of Petrom shares, Property Fund SA holds 9,887%, the European Bank for Reconstruction and Development, 2.026% and 6.214% are owned by minority shareholders.